Fiserv: Local home prices to fall further

November 15, 2010|By Mary Shanklin, Orlando Sentinel

Familiar with the prognosticators who say Orlando's housing prices have hit bottom? Well, Fiserv Inc. isn't one of them.

The Wisconsin-based company, which works with Moody's economy.com to forecast home prices, predicts prices in Metro Orlando will fall more than 13 percent from the end of this June through June 2011. And that's not even the bottom.

The service foresees a further dip of about 6 percent during the following 12 months, through June 2012.

Nationally, Fiserv's team of analysts expects home prices to drop through June of next year in nearly all metropolitan areas before they start to stabilize by the end of 2011. The Fiserv Case-Shiller indexes forecast that average single-family home prices in the U.S. will fall another 7.1 percent from the end of this June through June 2011.

"One of the consequences of the first-time buyer tax credit is that it delayed the ultimate bottoming out of many markets," said Fiserv Chief Economist David Stiff. "And that's why we expect to see a double dip of values in many markets."

Stiff went on to say that he expects Metro Orlando home prices to hit bottom in 2012.

Orlando still has some digging out to do, he said, because the area's housing inventory, packed with thousands of foreclosed homes on the market, is combined with a relatively high unemployment rate of more than 11 percent. The Fiserv analysis factors into the equation the fact that Orlando's four-county metro area, comprising Orange, Seminole, Osceola and Lake counties, attracts a lot of retirees.

"When I look at current unemployment rates for Florida, Orlando is doing better than other places in Florida but not better than the nation as a whole," Stiff said.

Compared with 375 other metropolitan areas studied, Orlando had one of the most dramatic price drops in the country at the end of the second quarter, with prices falling 50 percent from what Fiserv considers the area's peak in the fall of 2006. Only 16 other metro areas had home values that shrank more. The company calculated a median home price for the metro area of $155,000 as of June 30.

Joseph Doher, broker of Kissimmee-based Prudential Results Realty, said he wasn't in a position to second guess Fiserv economists but noted that prospective buyers can miss out of deals if they remain on the sidelines for too long waiting for a market to bottom out.

"It's like timing the stock market: By the time it hits bottom, it's too late to invest," he said. "Everyone wants to time it perfectly, but you could miss a good opportunity by procrastinating."